Bidding war erupts for Santa Cruz rentals

UCSC student group to ask City Council for ‘just eviction’ regulation, rent control

By
Jondi Gumz, Santa Cruz Sentinel

Thursday, April 27, 2017

SANTA CRUZ >> UC Santa Cruz student Owen Thomas, who teamed up with four fellow students to look for a place to live off-campus next year, was taken aback when Santa Cruz landlord Harry Dong emailed to ask if his group would be willing to pay more than the advertised price for his rentals and how much.

“Unfortunately, many more qualified applicants have applied to rent these houses than usual — indeed, more qualified applicants than houses I have available to accommodate them,” Dong explained to Thomas via email, which was forwarded to the Sentinel.

Thomas, who needs a place because he’ll no longer be a Stevenson College residential adviser, called the landlord’s strategy “unorthodox.”

He and his friends decided not to bid.

“It’s not ethical,” said Elyse Fischground, 21, a senior at UCSC and co-founder of Students Uniting Renters, a new group. “This market drives people to do things that are not really just for the renters.”

The Sentinel called and emailed Dong, the former longtime owner of Larry’s Photography, on Thursday and Friday but he did not respond.

FIRST TIME

Attorney Gretchen Regenhardt of California Rural Legal Assistance, which aids low-income county residents facing unlawful eviction, said this was the first time she had heard of a bidding war for rentals.

“Because of how the market is, there’s no relationship between the property owner investment and what’s being charged,” said Regenhardt. “It’s whatever the market will bear.”

She called the tactic “creative” and “terrible” and pointed out there is no law against it.

“I don’t see why it wouldn’t be legal,” she said. “There’s nothing at all to prevent a property owner from charging as much as they want in rent... It’s a symptom of how terrible our housing crisis is.”

The strategy also was new to Scott Hernandez-Jason, director of news and media relations at UC Santa Cruz, where undergraduate enrollment has grown from 14,900 in 2010-11 to 16,200 this year.

With juniors and seniors living off campus and little new housing being built locally, that drives up rent and pushes middle-income families out to Watsonville or Boulder Creek, where rents are lower.

Zillow, the real estate information company, reports median rent in Santa Cruz County is $2,913, and expects a 6 percent increase in 2017.

A year ago, UC Berkeley economics grad Alex Lubinsky launched Rentberry.com, a rental auction platform touting “transparency” for renters and landlords and charging tenants $25 once they get a lease. A BBC report said Rentberry has grown 100,000 listings; a search turned up 4,000 rentals in New York, 40 in San Francisco but none in Santa Cruz.

REACTION

“A lot of people were chiming in that people should not be surprised,” said Thomas.

Zav Hershfield, a UCSC alum and a leader in the Santa Cruz Tenants Organizing Committee, saw the post and rallied a small group of students and sympathetic local residents with protest signs Wednesday outside Dong’s property rental office on busy Mission Street.

“Housing prices are high enough as it is without landlords sparking bidding wars among tenants,” said Hershfield. “This practice will only cause prices to increase more quickly than they already do and speed up Santa Cruz’s ongoing gentrification.”

“We need development but we need it to be affordable,” Fischground said.

Supply and demand have driven up the Santa Cruz County median home price to $826,000 in March, just shy of the $827,000 record in August, according to Gary Gangnes of Real Options Realty, who tracks the numbers.

RENTER BURDEN

Santa Cruz County is the third worst metro area in the nation for renter cost burdens, according to the Harvard Joint Center for Housing Studies. Among renter households earning $30,000 to $45,000 in Santa Cruz County, four out of 10 pay half their income for rent. Fischground, a community studies major from Marin City, lives near campus in a house on Western Drive, splitting the rent of $4,500 with nine other people.

“Everybody is doubled up,” she said.

Fischground surveyed renters in Live Oak for the “No Place Like Home” research project co-led by UCSC sociologist Steve McKay.

She said Students Uniting Renters will ask the City Council for regulations on “just cause eviction” to prevent landlords from requiring tenants to move out without giving a reason and rent control.